INSUBCONTINENT EXCLUSIVE:
Last week, at a StrictlyVC event in San Francisco, we sat down with Maryanna Saenko and Steve Jurvetson, investors who came together to
create the investment outfit Future Ventures roughly one year ago
It was their first public appearance together since announcing their $200 million fund, and we started by asking Jurvetson about his
high-profile split from his old firm DFJ
(He said of the experience that &sometimes life forces a dislocation in what you&re doing, and it got me to become an entrepreneur for the
first time in a long time.&)
We also talked about how the two came together and where they&re shopping, as they have fewer constraints than
It was a wide-ranging chat that covered SpaceX and to a lesser extent Tesla, whose boards of directors Jurvetson sits on
We also talked about The Boring Company, in which Future Ventures has a stake, the profound dangers of the AI race between companies (and
countries), and whether the powerful psychedelic ayahuasca — or something like it — might represent an investment opportunity
Included in the mix was what Jurvetson described as potentially the &biggest money-making opportunity& he has &ever seen.&
Read on to learn
Our conversation has been edited lightly for length.
You&ve come together to build this new fund that has a 15-year investing horizon
Your interests overlap quite a bit
Maryanna, you&re a robotics expert with degrees from Carnegie Mellon; you were with Airbus Ventures before joining DFJ then heading later to
Who is better at what?
SJ: She better at everything, is the answer, but I think we&re better as a pair
The beauty of small team is you&re better than you would be on your own
I knew when I set off that I didn&t want to do it alone
I know that the people I&ve worked with over the last 20 years have made me better
The best investments I did at DFJ I largely attribute to the junior partner I was working with at the time, and I might not have done those
best deals if I was on my own.
There something about the dialectic, the discussion, the debates with someone you respect whose opinion is
valuable, so rather than thinking, ‘You handle this, I&ll handle that& and partitioning it, it more of a [back and forth]
So we have partner meetings all the time, just not any scheduled meetings.
Certainly, Maryanna deep background in robotics is a vein of
interest, as is all the aerospace stuff
But just a reminder, when I first interviewed her [Jurvetson originally hired her at DFJ], I was blown away that she had already invested in
several of the quirky sectors from quantum computer to phasor antennas for satellites to [inaudible but relating to space].
Of course you
would be investing [in this thing I&ve never heard of before].
MS: It going to become relevant, I promise.
Speaking of aerospace, you two
have invested in SpaceX, a company that DFJ had also backed
Is this company ever going to go public?
SJ: I think the official last tweet on this matter was that the company will go public after there
are regularly scheduled flights to Mars.
Which is when?
SJ: It might not be that far off
Probably within the 15-year [investing] cycle that we have now
Clearly the business is much more dramatic than just that
That the big storm on the horizon [that captures a lot of interest] but in the near term, there are multiple billions of dollars in revenue
They&re a profitable business
And frankly, they&re about to launch what may be the biggest money-making opportunity I&ve ever seen in my life, which is the broadband
satellite data business [Starlink, which is a constellation being constructed by SpaceX to provide satellite Internet access].
So there
plenty of good stuff happening before we get to Mars
That was just a way to put all the investment bankers off
They&re continuously hounding the company, ‘When are you going public? When are you going public?&
It is 17 years old
Have you made money off it [as an investor] thus far?
SJ: Oh, yeah, at our prior firm, they&ve [enjoyed] well over $1 billion in profit
[through secondary sales].
What do you think of scientists& concerns that these satellites going to ruin astronomy because they&re so
bright? I know SpaceX has tried to paint them
I also know SpaceX isn&t alone and that Amazon is also trying to put up a constellation, for example
But you&re a mission-driven firm
Should we be worried that we&re littering the sky with these things?
MS: One of the fundamental questions when you invest in technology is
what are the second-order effects that we&re aware of and what are the second-order effects that we&re not clever enough to foresee ahead of
time [and] to look holistically at these problems.
So first and foremost, right, it not just Space X
Many companies these days are trying to put up a constellation whether in [Low Earth Orbit] or [Medium Earth Orbit] or increasingly in
We need to think mindfully and work with the scientific communities and say, ‘What are the needs?& Because the reality is that the
communication is going to go up, and if it not from U.S
companies, it&ll be from European or from Asian companies
So I think the scientific community needs to wake up, unfortunately, to the reality that the Luddite form of saying, ‘Technology isn&t
and they should say say, ‘Here a set of metrics that we&d like to continue moving forward with.&
Ideally we can design to those specs
Beyond that, I fundamentally believe we&ll find ways to shine brighter lights and move further [out]
Honestly, most of the interesting imaging happens well past [Low Earth Orbit] and I think when we start building a lunar base, we&ll solve a
lot of these problems.
At StrictlyVC last event, we played host to a supersonic jet company called Boom
There are a handful of companies with which it competes, too&
MS: Oh, more than [a handful]
If you count just pure electric aircraft companies, I&ve met with 55 of, I would guess, around 200 or 300
Within that, supersonic is smaller, but it still in the dozens.
Whoa, that many? Does the world need supersonic jets — again?
MS: [As a]
recovering engineer and scientist, the way that I look at the space is does the business model fundamentally [make more sense] than when we
tried this the last time in the &80s
If the answer is, ‘This time, we&re a bunch of clever software kids building an aerospace device and don&t worry about it, we&ll figure
out how to build an aircraft,& I&m going to tell you all the reasons that isn&t necessarily going to work.
I think on the electric aircraft
side, we have a bunch of questions to answer about what is the timeline of battery density versus what is a mission profile for these
flights that actually makes sense
On the long-range side, we can look at what SpaceX might do with point-to-point capsules
[At the intermediate stage, hypersonic fight],I have not yet seen an engineering trajectory matched with a business model that I think
closes in this space, at all, so I&m not sure what the bankers are doing,
SJ: Also, the FAA regulatory cycle is very long
But [in addition to these reasons], our life becomes very simple the moment we know there are 55 to maybe 200 companies in a sector, and
this is true for small sat launch or eVTOL aircraft — huge swaths of the landscape
Whenever there more than one or two [companies in a space], we don&t even want to meet unless we&re just trying to understand what going on
Why would anyone invest in the 130th small sat launch company? We try to look for companies that are unlike anything that been seen before
at the time.
On that note, there only one new company that I know of that digging a tunnel-based transportation system, Boring Company
It another investment of Future Ventures
Did it come with a board seat?
SJ: No
We&re in the first round of investment.
Is this a real company? I&ve read it takes $1 billion to tunnel through a mile.
SJ: It depends
That the worst case, but it can be up there, like when Boring Company won this contract in Las Vegas for a very short segment, the
competition was bidding like $400 million for just a mile
It was like, really?
If you think about the pattern across aerospace with SpaceX, [the motor] issue with Tesla, and now potentially in
construction, fintech, and agriculture, there are industries that haven&t [seen major innovation] in a long time
So the top four companies in America that are digging tunnels all started in the 1800s
That an especially long time ago
And the whole point, too, with Boring is switching diesel to electric, to do continuous digging, to reengineer the entire thing with a
software and simulation mindset, to dramatically increase the speed and lower the cost
Think two orders of magnitude cheaper at least.
Steve, you&d said once before that in most of the deals you&ve funded across your career,
yours was the only check, that there just wasn&t any competition
But more people are focused on the ‘future& as an investment theme now
Is it harder to find those outliers?
SJ: It a little harder
We usually use that as a signal to look to a new market whenever there are multiple checks, When it a category, when there are conferences
about it, when other venture firms are talking about it, that usually a sure-enough sign that we already should have moved on to something
else.
MS: The simple reality, too, is the industry is focused on a handful of sectors — enterprise software, consumer internet, and the
like — and often there are fantastic funds with one or two edge-case investments, and that great, because we love those funds and we want
But there are very few funds where that trajectory is the straight and narrow of their fundamental thesis.
You raised $200 million for this
fund from tech CEOs and hedge funds and VCs; do you have the same constraints that other firms have?
MS: I don&t think we have particularly
fine constraints on anything, but we do have the constraint of our own conviction, our word and the quality of our characters, so one of the
theses when we raised the fund was that we don&t prey on human frailty, so no addictive substances, no [social media influencers] — and
not just because we&re bad at being cool hunters
But that not our intention; that not what we&re trying to create in the world.
I know you&re interested in AI
What does that mean? Are you funding drug development?
SJ: What have you heard? That a really good guess.
There are so many companies —
hundreds of them — using AI to try and uncover drug candidates, but they don&t seem to be getting very far or maybe they&re aren&t getting
far enough along as fast as I&d expected.
SJ: [We have a related deal in process]
Interestingly, we&ve done ten deals that have closed; we have three more that are in the process, two in the signed term sheet phase
Four are in the area of edge intelligence
.
MS: I&ll often come at things from how would I build this robot in the world to do some critical task and Steve often looks at it more
from the chip and power and processing and how you lay the algorithm onto the silicon
And between those two, we arrive at a really interesting thesis up and down the stack
So we&ve done Mythic, an edge intelligence chip company, but we&ve also looked at this idea that we&re going to send out these AIs into the
world but we basically bake them into these edge devices that are terrible [because they don&t work well].
The real issue is an AI that
getting trained somewhere in some cloud then getting pushed to your edge device and then, good luck
But increasingly [we&re thinking] about continuous improvement of those AIs as they&re running in real time and mindful of how we shuttle
the data back to the mother ship data centers
[We&re looking to] enable continuous improvement and acceleration of that learning
We have a number of portfolio companies up and down that stack that I&m incredibly excited about.
That all sounds comfortably pedestrian
compared to the very big picture, wherein a small group of companies is amassing all the richest data to train AI and are growing more
Steve, you&ve talked about this before, about your concerns that one day there could be very few companies, which would exacerbate income
You said this could be a bigger threat to society than climate change
Do you think these companies — Facebook, Amazon, Google — should be broken up?
SJ: No, I don&t think they should be broken up, but I do
think it an inexorable trend in the the technology business that there are power laws within firms and between firms
If you want to maintain capitalism and democracy, it not self-rectifying and it only going to get worse
Compared to when we last spoke about this [in 2015], it gotten a lot worse
The data concentration, the usage of it.
Think, for example, of SenseTime in China
it recognizes faces better than any other algorithm on earth right now
power laws and power laws between countries as well
That just one new pejoration as AI and quantum computing escalates.
So everyone in technology and who invests in it should be thoughtful
about what this means and think about entrepreneurial paths to the future we want to live in
how we get from here to there is not obvious
The markets [will handle some but not all of these things]
So it very worrisome and when I said it worse than climate change, I meant it will have more impact on whether humanity makes it through the
Climate change [may do us in] 200 years from now but there some serious pressing issues over the next 20 years.
And breaking up these
companies isn&t part of the solution.
It almost like this notion of controlling an AI that greater than human intelligence
How would you ever imagine you would control such a thing? How would you even imagine understanding its inner workings? So the notion that
through regulation you could break up a natural monopoly when everything that fixes the industry creates a natural monopoly, it&d be like
whack-a-mole.
What the answer? Looking around the corner, what are you funding that going to blow people minds? Ayahuasca? Is there a market
for that? I know it everywhere.
SJ: [Looking shocked.] There are two companies, one we wired funds earlier today and the other is a signed
term sheet and they relate to your questions.
MS: We should check if the office is bugged [laughs].
SJ: There a lot going on
